x Abu Dhabi, UAEWednesday 26 July 2017

Obama slams 'fat cats' over new bonuses on Wall Street

"Some people on Wall Street still don't get it," says president as he excoriates bankers for fighting regulatory control "tooth and nail".

It seems that nobody has a good word to say about bankers these days. Taking time out from picking up the Nobel Peace Prize and preparing to combat climate change in Copenhagen, Barack Obama, the US president, has hit out at Wall Street's "fat cats". "I did not run for office to be helping out a bunch of fat-cat bankers on Wall Street," Mr Obama said in an interview with CBS television.

With unemployment at about 10 per cent, Mr Obama voiced frustration that "some people on Wall Street still don't get it". Lavish pay and bonuses have been blamed for encouraging excessive risk-taking that caused a global crisis and prompted government stimulus packages. Ironically, the opportunities from these rescue packages have led to many banks making bumper profits, part of which they plan to pass on to their staff. In the US, a so-called pay czar appointed by the government has since reviewed compensation at bailed-out firms and in most cases has restricted salaries to US$500,000 (Dh1.83 million) a year.

He has yet to rule on bonuses. Several of the nation's largest lenders, such as Bank of America and Goldman Sachs, have repaid the billions they were given under the Troubled Asset Relief Programme. Only two major banks still hold US government capital from the programme: Wells Fargo, which received $25bn, and Citigroup, with some $45bn. Mr Obama told CBS he believed some banks had paid back all the bailout funds to escape government controls regulating such things as bonuses.

"They're still puzzled why it is that people are mad at the banks. Well, let's see. You guys are drawing down $10 to $20 million bonuses after America went through the worst economic year - in decades and you guys caused the problem. "These same banks who benefited from taxpayer assistance who are fighting tooth and nail with their lobbyists - up on Capitol Hill, fighting against financial regulatory control," Mr Obama added.

* with agencies @Email:rwright@thenational.ae